Turkish economy under-performing since 2008

If you look at Turkey’s economic performance compared to other countries, it has stagnated since 2008.

“When we could not even produce a pin,” the late former prime minister and president Süleyman Demirel would say in the latter decades of the 20th century, “now we are producing cars.” 

Those who responded by asking what other countries had been producing when Turkey could not produce pins, and what they were making now, would have their suspicions confirmed in today's Turkey. 

Turkey’s 82 million people make up 1.05 percent of the world’s 7.8 billion population. The latest World Bank figures put global GDP at $86 trillion, while Turkey’s GDP last year was nearly $770 billion, or 0.89 percent of the world economy. 

Thus, Turkey is not pulling its economic weight. Greece, on the other hand, represents 0.14 percent of the world population, yet even while emerging from a severe financial crisis it produces 0.25 percent of the world economy. 

When Turkey’s Justice and Development Party (AKP) came to power in 2002, Turkey’s share of the world population was 1.03 percent and it had a 0.7 percent share of the world’s economy. The Turkish economy has witnessed major growth under the AKP, as Turkey’s share of the world population has remained almost constant while its contribution to the global economy has increased to 0.89 percent from 0.7 percent in 17 years. 

But comparing the present day with 2008 gives a different picture. In 2008, Turkey’s share of the world population was 1.04 percent and its share in the world economy was 1.2 percent.

From World Bank
From World Bank

In 2008, Turkey was still implementing reforms to try to enter the European Union. A stand-by agreement with the International Monetary Fund ended in May that year, but the government dragged its feet in talks to renew the IMF deal saying the economy could now stand on its own feet. President Recep Tayyip Erdoğan has repeatedly said in the last couple of years that Turkey would never return to the days when its economic policies were not totally independent.

Even though Turkey saw sharp economic growth in 2010 (9.2 percent) and 2011 (8.8 percent), the Turkish economy was in a better position in 2008 than it is today. In 2008, despite a global financial crisis that did not bypass Turkey, the country’s share in the world economy was significantly higher than its share in the world population. Turkey’s comparative performance has been in continuous decline since 2008.

Turkey’s GDP per capita has also remained constant between 2008 and 2019. People in Turkey who want to live in a wealthier, freer and safer country should question what has gone wrong since 2008.  

The figures show the combined EU and U.S. share of the global economy is almost 45 percent, while they make up just 10 percent of the population. If we include Canada, Japan, Australia, Switzerland, Israel, South Korea and Norway, the relation between productivity and Western democratic values becomes clearer. In the medium-run, the comparative economic successes of these countries will likely remain intact given the quality of their education systems.  

What is sad is that the people who run Turkey ignore these facts and make political choices that imply a drift away from the West.

© Ahval English

The views expressed in this column are the author’s and do not necessarily reflect those of Ahval.